Correctional and detention management services provider The GEO Group, Inc. (GEO), Friday said it closed the acquisition of Behavioral Interventions, Inc., a private provider of compliance, monitoring and treatment programs. The $415 million all cash transaction is expected to diversify GEO's services to encompass the entire corrections, detention, and residential treatment spectrum.
Behavioral Interventions or BI provides electronic monitoring services, through radio frequency and global positioning system equipment, voice identification, and remote alcohol detection systems.
GEO Group said BI would be integrated into its wholly-owned subsidiary, GEO Care. It anticipates annual cost synergies from the acquisition of about $3-5 million.
The acquisition would not contribute to fiscal 2011 pro forma earnings and would be accretive from 2012. GEO expects 2011 pro forma earnings to be in a range of $1.55 to $1.65 per share, excluding start-up expenses and acquisition-related expenses.
Currently, analysts polled by Thomson Reuters, on average, expect earnings of $1.63 per share for 2011. Analysts' estimates typically exclude special items.
GEO Group expects the acquisition to propel annual revenues higher by about $115 million, with fiscal year 2011 revenues seen coming in at $1.6 billion.
Revenue for fiscal 2010 increased to $1.14 billion from $1.04 billion for fiscal 2009.
Boca Raton, Florida-based GEO Group provides government-outsourced services specializing in the management of correctional, detention, and mental health and residential treatment facilities in the United States, Australia, South Africa, and the United Kingdom.
GEO is currently trading at $24.36, up $0.09 or 0.37%, on the NYSE.
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